Svetlana Gorodinskaia Vs ACIT (ITAT Chandigarh)
ITAT Upholds Higher Tax on Unexplained Cash: Confirms Section 69A Read with 115BBE on Survey Disclosures; Judicial Summary: ITAT Chandigarh on Taxation of Unexplained Cash Found During Survey
This summary details the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench’s decision in Svetlana Gorodinskaia Vs ACIT, concerning the taxability of unexplained cash found during a survey operation. The key legal issue was whether this cash should be treated as normal business income or as “unexplained money” under the special provisions of the Income Tax Act, 1961.
Facts of the Case
A survey operation under Section 133A of the Income Tax Act, 1961, was conducted at the business premises of M/s G. H. Derma Centre, a dermatological spa centre proprietorship concern of the assessee, Mrs. Svetlana Gorodinskaia, on April 23, 2018.
During the survey, the Income Tax authorities found cash amounting to ₹6,13,545/- against a book balance of ₹2,06,545/-, resulting in an excess cash of ₹4,07,000/-. The assessee’s husband, Dr. Ravsharan Singh, who was present, recorded a sworn statement admitting that he could not explain the source of the excess cash and surrendered ₹4,07,000/- as additional income for the relevant year (AY 2019-20).
The assessee subsequently filed her Income Tax Return, disclosing the surrendered amount under the head “Income from Other Sources” and paid tax at normal slab rates, also attempting to set off the amount against the current year’s business loss.
